Selling on - Latvia

Updated 11/2011

Legal requirements

There are two laws governing the sale of shareholdings in Latvia:

The Commercial Law [685 KB]
The Law on State and Local Government Owned Capital Shares and Enterprises

Ways to alienate company share capital

Under the Commercial Law a shareholder may sell, gift, exchange or bequeath a shareholding.

Expropriation without compensation

Where a person holds all the shares in a limited-liability company (SIA), that person may gift, exchange or bequeath them without needing to follow any special procedures. Where a person owns only a part of the share capital in a limited-liability company (SIA), those shares may be gifted or exchanged only with the permission of other shareholders.

A shareholder in a joint-stock company (AS) may gift, exchange or bequeath the shares without needing to follow any special procedures.

In the case of the death of a partner in a partnership, the partner’s heir has the right to become a partner of the partnership, if this is specified in the partnership agreement or if all partners of the partnership so agree.

In the case of the death of a member of a limited-liability company (SIA), the member’s heir inherits the shares, if the company’s Articles do not provide that the shares pass into the company's ownership. If the company’s Articles provide that the deceased shareholder's shares pass into the company's ownership, the company is obliged to compensate the heirs in accordance with the amount of liquidation surplus to which the deceased would have been entitled at the date of death.

Expropriation with compensation

Where a person holds all the shares in a limited-liability company (SIA) or joint-stock company (AS), that person may gift, exchange or bequeath them without needing to follow any special procedures.

Whereas if a person owns only a part of the share capital in a limited-liability company (SIA), the remaining shareholders have pre-emption rights. These rights must be exercised within one month of the day on which the board of the limited-liability company receives the notice of intent to sell the shares.

Where a shareholder in a joint-stock company (SA) owns a part of the share capital, the shareholder may sell the shares without needing to follow any special procedures, except in cases where the company’s Articles grant the other shareholders pre-emption rights. The pre-emption rights must be exercised within one month of the day on which the board of the joint-stock company receives the notice of intent to sell the shares.

Sale of shares

Before the sale the shares must be valued so as to agree on the sale price. During the negotiation stage the vendor and the purchaser agree on essential issues such as the price, the payment method and terms and on the assistance of the former owner following the sale of the shares. The purchaser may also choose to carry out a more detailed assessment of the enterprise, known as ‘due diligence’.

After the valuation has been completed the parties draw up a sale agreement and submit the documents required for the re-registration of title to the company's board.

Taking over an existing company is a worthwhile alternative to setting up a new business.

Takeovers — Latvia

Administrative procedures

Company re-registration

You can fill in forms to re-register the company electronically using the special online form available on the website of the Enterprise Register. Completed forms must be submitted to the regional office of the Enterprise Register.